How the US made affordable homes illegal — Transcript

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1. 0:01So I spend a lot of time looking at houses on Zillow.
2. 0:05And lately, I noticed that, even in places where houses are usually expensive...
3. 0:10they seem even more expensive.
4. 0:15Like here, in the San Francisco Bay Area.
5. 0:19What has the last year been like?
6. 0:34For years, the Bay Area has been an extreme example
7. 0:38of how difficult it is to find affordable housing in the US.
8. 0:41It’s where Silicon Valley bus drivers sleep in their cars at night,
9. 0:45because they can’t afford housing near work.
10. 0:48And where school teachers can’t afford to live in the counties they teach.
11. 0:53But it’s not just the Bay Area.
12. 0:55The lack of affordable housing is a national problem.
13. 0:59And right now, it’s worse than ever.
14. 1:02We've seen, over the last year,
15. 1:04housing prices reach a level they've never reached before in American history.
16. 1:08They kind of just look like a rocket ship going to the moon:
17. 1:11housing prices reaching a median of $350,000 for the median American home.
18. 1:16Those prices have made rents more expensive,
19. 1:19and have made homeownership less attainable for millions of Americans.
20. 1:25So why is this happening?
21. 1:27And how do we bring that rocket ship closer to Earth?
22. 1:33We can think of today’s housing prices in terms of a supply-and-demand problem.
23. 1:38On the demand side, there are a few things happening.
24. 1:41The first is a generational shift in who’s buying homes.
25. 1:45Millennials are the biggest generation in American history,
26. 1:48and they're aging into their prime home-buying years.
27. 1:51On top of that, mortgage rates are at an all-time low,
28. 1:54which means it’s very cheap to borrow the money needed to buy a house.
29. 1:58That’s enticed more people to buy if they can, making demand for houses even higher.
30. 2:04The problem is that supply isn’t matching that demand.
31. 2:10From 2010 to 2019, there were fewer homes built in the US than in any decade since the 1960s.
32. 2:18In particular, the construction of smaller, entry-level housing,
33. 2:21the kind made for first-time home buyers, has dropped dramatically.
34. 2:25In the 1980s, those "starter" homes made up around 40% of all homes built.
35. 2:30Today, it’s closer to 7%.
36. 2:33In 2018, one estimate said the US housing market was 2.5 million homes short of meeting demand.
37. 2:41By the end of 2020, it was 3.8 million.
38. 2:44And that's driving a big part of the problem, both for renters
39. 2:47and for people who want to be homeowners.
40. 2:49The shortage is worst in the places where demand is highest,
41. 2:52near good jobs, transit, and schools.
42. 2:55And one pretty straightforward solution to that
43. 2:58is to just build more homes in those places.
44. 3:02But for years, there’s been one big obstacle to that:
45. 3:06we aren’t allowed to.
46. 3:08Take a look at this map of the Bay Area.
47. 3:11It’s showing something called zoning,
48. 3:13or local regulations that decide what can be built where.
49. 3:16This much of the region is zoned for residential housing.
50. 3:20In blue are areas zoned to allow multi-family housing,
51. 3:24while the areas shaded in pink are zoned for single-family housing only.
52. 3:30That’s 82 percent of all residential land in the Bay Area.
53. 3:35What it means is that you've banned the ability for anyone to build anything
54. 3:39other than a single unit of housing on that lot of land.
55. 3:43And in many towns, like Atherton,
56. 3:45they’ve excluded all multi-family housing from their neighborhoods.
57. 3:50And that doesn't just mean a giant apartment building.
58. 3:52It means things like duplexes, things like fourplexes...
59. 3:56Things like that are illegal in the majority of the country.
60. 3:59This is an example of something called "exclusionary zoning."
61. 4:03It’s a big part of the reason for the housing supply shortage in the US.
62. 4:07And single-family-only zoning is just one way local laws limit how much housing we can build.
63. 4:13Many places also employ height restrictions.
64. 4:16In Cupertino, California, some areas are zoned for multi-family buildings,
65. 4:22but they don’t allow any buildings over two stories.
66. 4:27Parking requirements are often written into zoning laws, too.
67. 4:30Cupertino requires developers to set aside space for two parking spaces
68. 4:34for each unit of multi-family housing.
69. 4:38That means, if you were building an apartment complex that had 100 units,
70. 4:42you’d need to find space for 200 parking spots.
71. 4:45Which usually means buildings that size don’t get built at all.
72. 4:49They lower the number of units they're actually building
73. 4:52so they can save space for those parking spaces.
74. 4:55And then, those units become more expensive
75. 4:57because the land still stays the same cost to the developer.
76. 5:00And you then get a situation where potentially more affordable units
77. 5:04turn into higher-income-servicing units.
78. 5:09Another feature of many zoning laws is minimum lot sizes.
79. 5:12It means builders are legally required to allot a minimum amount of land for each home.
80. 5:18Often a large amount of land.
81. 5:21In Cupertino, most single-family lots must be at least 5,000 square feet each.
82. 5:26Starter homes are usually around 1,400 to 1,500 square feet.
83. 5:31And so you've basically banned all that type of housing.
84. 5:34In Atherton, the minimum lot size for homes is one acre: more than 43,000 square feet.
85. 5:41Which makes it virtually impossible to build any kind of affordable home there.
86. 5:46Together, exclusionary zoning laws like this push builders across the country
87. 5:50to focus on bigger, luxury homes,
88. 5:53instead of smaller starter homes, or multi-family housing.
89. 5:57Essentially creating gated communities in public spaces.
90. 6:00What you are saying is that you are only allowing people
91. 6:03who have already been able to partake in the wealth of this country,
92. 6:06and to grow their income,
93. 6:07and have access to high opportunity jobs and education,
94. 6:09to live in our neighborhoods.
95. 6:11Historically, some of the first zoning laws in the US were engineered for that exactly:
96. 6:16to block people of color, and in particular Black Americans,
97. 6:20from living in predominantly white neighborhoods.
98. 6:22Today, the laws don’t explicitly mention race, but they continue to worsen segregation.
99. 6:28In the Bay Area, the more single-family zoning in a neighborhood, the whiter it is.
100. 6:34But all this has another effect as well:
101. 6:37By shrinking the pot of new housing getting built, while demand keeps rising,
102. 6:42it drives up the cost of housing for everyone.
103. 6:46Changing zoning laws can be difficult.
104. 6:49And often, the biggest obstacles are the wealthiest residents.
105. 6:52The process is usually defined by who shows up to these public meetings.
106. 6:56And what you have is often a much whiter, wealthier crowd,
107. 7:01the ones who come and say, "I don't want this in my community,"
108. 7:03"I'm concerned about what will happen to my property values."
109. 7:05And then there's this kind of code word, “neighborhood character.”
110. 7:09Remember those teachers I mentioned,
111. 7:11who can’t afford to live in the counties where they teach?
112. 7:14Well in 2018, one local school district proposed a solution:
113. 7:18building affordable housing units for teachers in San Jose.
114. 7:22It caused an uproar among San Jose parents,
115. 7:25who petitioned against "changing the neighborhood."
116. 7:28It may not seem like a big deal when one wealthy neighborhood
117. 7:31blocks one multi-family development.
118. 7:34The problem is that it happens all the time:
119. 7:36Communities block new housing everywhere.
120. 7:39People are, when they hear this kind of rhetoric, very confused.
121. 7:42Because they're like, "I don't want to live in a place with ten thousand apartment buildings.
122. 7:47It doesn't make sense to do that."
123. 7:49And they're right. No one is saying that every neighborhood in every city
124. 7:53should be ten thousand-foot apartment buildings or anything like that.
125. 7:58But even small, gradual changes to zoning laws can have an impact.
126. 8:02For example, allowing smaller homes on smaller lots, or simply allowing duplexes,
127. 8:08would double capacity for housing in some areas.
128. 8:12In recent years, some cities like Berkeley, Minneapolis, and Portland
129. 8:16have taken the huge step of ending single-family zoning.
130. 8:20But the problem is nationwide.
131. 8:22The real fix is going to happen when these decisions start being made, and start being regulated,
132. 8:27at the statewide level or at the federal level in some capacity.
133. 8:31Today, the Biden administration is attempting to tackle exclusionary zoning
134. 8:35through a five billion-dollar program,
135. 8:37that would give money to localities that remove exclusionary zoning policies.
136. 8:41But even that may not be enough.
137. 8:44This is more than any presidential administration has done on this topic,
138. 8:48either Democrat or Republican.
139. 8:51It is also very small in the face of this problem.
140. 8:54They want to take action, they recognize how big of a deal it is,
141. 8:56but they are not actually willing to create the kind of political blowback
142. 9:01from often very high-value voters living in suburban environments.
143. 9:06Ending America's housing shortage will require real political willpower.
144. 9:11And it’ll require people across the country to take a look at their own neighborhoods:
145. 9:17what gets built, who gets excluded,
146. 9:20and how to make homeownership achievable for the millions who are shut out.